A Call Option Contract

question 48

Multiple Choice

A call option contract:

• A) obligates both the buyer and the seller.
• B) obligates the buyer but not the seller.
• C) grants rights to the buyer and obligates the seller.
• D) grants rights to the seller and obligates the buyer.
• E) grants rights to both the buyer and the seller but does not obligate either party.

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Definitions:

Annual Cost Savings

The reduction in total expenses achieved during a fiscal year, often as a result of process improvements or budget adjustments.

Intangible Benefits

Non-monetary advantages that cannot be easily quantified or directly measured, such as brand recognition, customer loyalty, and employee satisfaction.

Automated Equipment

Machinery and tools that operate independently or with minimal human intervention, often used to improve efficiency in manufacturing processes.

Financially Attractive

Describes investments, projects, or opportunities that are expected to provide a high return relative to their cost.